Tuesday, December 27, 2016

Acquisitions: Chinese investors in the purchase-to-noise – MIRROR ONLINE

The number of Chinese acquisitions in Germany has reached a new high. Investors from China and Hong Kong purchased between January and the end of October, a total of 58 German companies – 19 more than in the entire year of 2015, as the consulting firm Ernst & Young.

Still far more impressive in the amount issued to Chinese investors this year for Corporate acquisitions in Germany: 11.6 billion euros is, however, a good 20 Times as much as 2015 and more than in all previous years together.

Three Deals alone beat, according to the EY-study, with together more than seven billion euros: the Acquisition of Augsburg-based industrial robot manufacturer Kuka (4.6 billion), the Munich-based machinery manufacturer KraussMaffei (1.0 billion) and EEW (1.6 billion), a manufacturer of waste incineration plants in Göppingen, Germany.

“The Acquisitions by Chinese investors has increased steadily in recent years,” says Kai Lucks, professional for corporate takeovers and the Chairman of the Federal Association of Mergers & Acquisitions. “However, in China, there are only a few Acquisitions by German companies. The Situation is asymmetric.”

German investors in China have on the outside

also, German large interest in Chinese companies, said the former Siemens Manager. “Through a Takeover to win a sales platform, Management and employees.” Often there is “difficult to explain Ad-hoc prohibitions or against the wind, German companies are hampered in Acquisitions in China,” says Lucks. “The policy should pay attention to symmetry.”

Because foreign investors are facing in China, with very high hurdles. In the 2015 revised policies of the Chinese government 38 business fields in which foreign takeovers in principle, are prohibited. In addition, there are many other areas in which foreign companies are forced to accept a Chinese Partner in joint ventures.

In Germany not dominated by Economists and business specialists in the ministries so far, the pure doctrine, that an open market has advantages – even if a trading partner offers the appropriate open access to the market. Meanwhile, doubts as to whether this is in the case of China, to be really useful.

Dangerous wrong location

Because the power track commander-in-chief in Beijing, with the stated goal to by 2050 in all the key industries, the technological world market leader – the Acquisition of High-Tech companies, serves this purpose. In addition, German companies that want to sell in China their products will be forced routinely to the disclosure of their technology. And, as before, mainly medium-sized German companies in China, the experience that your products can be immediately copied, without the authorities to intervene.

That the Chinese dream of the technology the nation is behind many acquisitions, is obvious: the Kuka Chart show, for example, is a leading manufacturer of robots for industrial production. The buyer Midea is a Low-Tech-manufacturer of air-conditioning systems and household appliances, with no experience in automation. Overlaps in the product portfolio.

“let’s not protectionism, but fair conditions of competition”, – stated in the Federal Ministry of economic Affairs. Minister Sigmar Gabriel (SPD) wants to explore at a European level, “how to enable fair competition and the Trend to increased Acquisitions”, especially through subsidized and/or state-owned companies – “on a European level can meet”, a Ministry spokesman explained. Gabriel also wants to change on the national level, the foreign trade law. Bavaria’s Economics Minister Ilse Aigner (CSU) requires that the Federal government extends its Veto.

exchange sense

The purchase of a special machine manufacturer, Aixtron by a Chinese company was busted after the difference had forbidden US President Barack Obama to the acquisition of the US business, with reference to threats to U.S. security. Chinese investors completed in addition, negotiations on the purchase of the semi-conductor supplier Siltronic.

“It is striking that the Chinese are often very high purchase price,” says professional Lucks. “In many cases, a strategic interest of the Chinese state is behind this. I would watch every single case of a Takeover.” So far, he does not see the danger, “that there are basic things moving”.

And for the acquired companies become the majority owners are in no way a harm: “The Chinese have become in recent years very reasonable investors,” says Lucks. “You have supported acquired German companies in the last years of production built, not dismantled.” In the context of internationalisation, it could make for German companies a lot of sense to have a Chinese Investor. Lucks with this assessment alone, a similar comment also in the China-Business-working business people.


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